2005 Annual Report - Report on Performance

BC Hydro’s Annual Report is designed to address the Provincial Government’s Budget Transparency and Accountability Act (BTAA) requirement to report against the performance targets set out in our Annual Service Plan. In addition, we also report on various activities that align with the Global Reporting Initiative 2002 Guidelines for Triple Bottom Line reporting.

The Sustainability Scorecards contain February 2004 Service Plan measures. BC Hydro has committed to meet or exceed the goals in the Service Plan, and has developed strategies and set performance targets as the baseline against which to measure results. The Lines of Business (LoBs) and subsidiaries are responsible for performance within their business areas, and are accountable to BC Hydro’s overall direction.

Long-Term Goals

BC Hydro’s new purpose is to provide reliable power, at low cost, for generations. This purpose is supported with 15 long-term goals developed in fiscal 2005 and forms the basis for our Service Plans going forward.

This year’s Report on Performance is structured around the six new long-term goal categories: Customer, Employees, Social, Environment, Financial and Enablers. The 15 long-term goals encompassed within these categories provide strategic direction for the management of our business in environmentally, socially and financially responsible ways over the next 20 years. Specific performance measures and targets will be developed during the current fiscal year for each of the goals. All measures will be results-based where possible to enable accurate tracking of our performance. Our performance in meeting these long-term goals will be tracked in our quarterly and annual reports.

Measures Assurance Program

During fiscal 2004/2005, BC Hydro’s Audit Services group developed assurance standards for performance measures. Internal audits were conducted for three performance measures using these standards. These measures were: Cost per Megawatt Hour; Capital, Operating, Maintenance and Administration Cost per Customer; and New Energy from Clean Energy. The results showed that there were no major issues to be addressed. All internal audits are reviewed by BC Hydro’s Audit and Risk Management Committee of the Board.

Benchmarking Highlights

BC Hydro participated again in the Haddon Jackson Associates (HJA) benchmarking program. From 1999 to 2004, 93 per cent of our installed capacity has been benchmarked by HJA. These studies showed that BC Hydro’s major generating stations benchmark in the first or second quartile of comparable facilities in North America in terms of cost and performance. However, the studies also showed that in past years we had been underinvesting in our facilities, which will impact future performance. In recent years, our facilities investment level has been increasing to ensure that performance is maintained or improved.